WGU D089 Principles of Economics
Questions with Correct Answers
Economics - CORRECT ANSWER -The study of how humans make decisions in the face of
scarcity.
Factors of Production - CORRECT ANSWER -Describes theninputs used in the production of
goods or services to make an economic profit.
Macroeconomics - CORRECT ANSWER -A branch of economic dealing with the performance,
structure, behavior and decision making of an economy as a whole.
Microeconomics - CORRECT ANSWER -A branch of economics that studies the behavior of
individuals, and firms in making decisions regarding the allocation of scarce resources and the
interactions among these individuals and firms.
Scarcity - CORRECT ANSWER -The basic economic problem, the gap between limited, scarce,
resources and theoretically limitless wants
Opportunity Cost - CORRECT ANSWER -The next best alternative that is given up when a choice
is made.
Think at the Margin - CORRECT ANSWER -Thinking about what the next step or an additional
action means for a person.
Marginal Benefit - CORRECT ANSWER -The incremental increase in the benefit to a consumer
caused by the consumption of one additional unit of a good or service.
,1st (Principles of Economics ) - CORRECT ANSWER -Everyone faces tradeoffs
,2nd (Principles of Economics ) - CORRECT ANSWER -The cost of something is determined by
what you give up to get it.
3rd (Principles of Economics ) - CORRECT ANSWER -Rational people think at the margin.
4th (Principles of Economics ) - CORRECT ANSWER -People respond to incentives.
5th (Principles of Economics ) - CORRECT ANSWER -Trade can benefit everyone.
6th (Principles of Economics ) - CORRECT ANSWER -Markets are a sound method of organizing
economic activity.
7th (Principles of Economics ) - CORRECT ANSWER -Government may be able to improve market
outcomes.
8th (Principles of Economics ) - CORRECT ANSWER -A nation's standard of living depends on its
ability to produce.
9th (Principles of Economics ) - CORRECT ANSWER -Printing too much money causes prices to
rise.
10th (Principles of Economics ) - CORRECT ANSWER -There is short-run tradeoff between
inflation and unemployment.
Economic Systems - CORRECT ANSWER -A system of the production, resource allocation, and
distribution of goods and services within a society or give geographic area.
, Traditional Economy - CORRECT ANSWER -A economic system that relies on customs, history.
and time-honored beliefs. Guides economic decisions such as production and distribution.
Command Economy - CORRECT ANSWER -An economic system in which production, investment,
prices, and incomes are determined centrally by a government.
(Centralized)
Market Economy - CORRECT ANSWER -An economic system in which the decisions regarding
investment, production, and distribution are guided by the price signals created by the forces of
supply and demand
(Decentralized)
Mixed Economy - CORRECT ANSWER -An economic system in which both private enterprise and
a degree of state monopoly (usually in public services, defense, infrastructure, and basic
industries) coexist.
Positive Economics - CORRECT ANSWER -The study of economics concerned with what is and
what will happen if a course of action is taken or not taken.
Normative Economics - CORRECT ANSWER -The study of economics with what is and what will
happen if a course of action is taken or not taken.
Economic Models - CORRECT ANSWER -A simplified version of reality that allows people to
observe, understand and make predictions about economic behavior.
Economic Indicators - CORRECT ANSWER -A statistic about an economic activity.
Questions with Correct Answers
Economics - CORRECT ANSWER -The study of how humans make decisions in the face of
scarcity.
Factors of Production - CORRECT ANSWER -Describes theninputs used in the production of
goods or services to make an economic profit.
Macroeconomics - CORRECT ANSWER -A branch of economic dealing with the performance,
structure, behavior and decision making of an economy as a whole.
Microeconomics - CORRECT ANSWER -A branch of economics that studies the behavior of
individuals, and firms in making decisions regarding the allocation of scarce resources and the
interactions among these individuals and firms.
Scarcity - CORRECT ANSWER -The basic economic problem, the gap between limited, scarce,
resources and theoretically limitless wants
Opportunity Cost - CORRECT ANSWER -The next best alternative that is given up when a choice
is made.
Think at the Margin - CORRECT ANSWER -Thinking about what the next step or an additional
action means for a person.
Marginal Benefit - CORRECT ANSWER -The incremental increase in the benefit to a consumer
caused by the consumption of one additional unit of a good or service.
,1st (Principles of Economics ) - CORRECT ANSWER -Everyone faces tradeoffs
,2nd (Principles of Economics ) - CORRECT ANSWER -The cost of something is determined by
what you give up to get it.
3rd (Principles of Economics ) - CORRECT ANSWER -Rational people think at the margin.
4th (Principles of Economics ) - CORRECT ANSWER -People respond to incentives.
5th (Principles of Economics ) - CORRECT ANSWER -Trade can benefit everyone.
6th (Principles of Economics ) - CORRECT ANSWER -Markets are a sound method of organizing
economic activity.
7th (Principles of Economics ) - CORRECT ANSWER -Government may be able to improve market
outcomes.
8th (Principles of Economics ) - CORRECT ANSWER -A nation's standard of living depends on its
ability to produce.
9th (Principles of Economics ) - CORRECT ANSWER -Printing too much money causes prices to
rise.
10th (Principles of Economics ) - CORRECT ANSWER -There is short-run tradeoff between
inflation and unemployment.
Economic Systems - CORRECT ANSWER -A system of the production, resource allocation, and
distribution of goods and services within a society or give geographic area.
, Traditional Economy - CORRECT ANSWER -A economic system that relies on customs, history.
and time-honored beliefs. Guides economic decisions such as production and distribution.
Command Economy - CORRECT ANSWER -An economic system in which production, investment,
prices, and incomes are determined centrally by a government.
(Centralized)
Market Economy - CORRECT ANSWER -An economic system in which the decisions regarding
investment, production, and distribution are guided by the price signals created by the forces of
supply and demand
(Decentralized)
Mixed Economy - CORRECT ANSWER -An economic system in which both private enterprise and
a degree of state monopoly (usually in public services, defense, infrastructure, and basic
industries) coexist.
Positive Economics - CORRECT ANSWER -The study of economics concerned with what is and
what will happen if a course of action is taken or not taken.
Normative Economics - CORRECT ANSWER -The study of economics with what is and what will
happen if a course of action is taken or not taken.
Economic Models - CORRECT ANSWER -A simplified version of reality that allows people to
observe, understand and make predictions about economic behavior.
Economic Indicators - CORRECT ANSWER -A statistic about an economic activity.
